Sears Canada cuts 245 jobs; outsources to India

SEARS

Sears Canada is cutting 245 mainly head office jobs with some of the work being outsourced to firms with operations outside the country, a senior spokesperson confirmed Tuesday.

The biggest group, comprising 138 jobs, is in Sears' information technology department, said Vince Power, the national retailer's vice-president of communications.

Nearly 100 affected jobs are in finance and 8 are in payroll, he added.

The employees received layoff notices Monday and will be leaving at various times over the next six months, Power said in a telephone interview. Some may find other work within Sears, he said.

The announcement comes as more Canadian companies move their information technology services to outside suppliers, many with operations outside the country.

With Canada's unemployment rate at 7.2 per cent, the loss of high-tech jobs has sparked outrage among some consumers.

Sears said the move will ensure the company's information technology services are more efficient and up to date, which is better for customers.

"These days to keep up to date with all the system investments you need to make, it's not our core business. We're leaving it to people we feel can do it more efficiently," Power said.

The suppliers, which include IBM, will be moving some of the work offshore, Power confirmed. "Certainly, some of the work is going to be done outside the country. That's their business model," Power said.

Most of the IT work will move to the Philippines while the finance and payroll work will move to India, he said.

Sears will continue to employ hundreds of other people in its information technology department, he added. "It's just one of the functions. It's the application development and application management end of things."

Earlier this year, Royal Bank of Canada came under fire from customers when a fired employee said he was being asked to train his replacement, a temporary foreign worker from India.

The bank was in the process of outsourcing some of its IT jobs to a firm in India.

The bank denied it had hired temporary foreign workers and its supplier, iGate Corp., said it had complied with all relevant Canadian laws.

But the bank also later apologized and offered all 45 displaced employees other work. It also enhanced its supplier code of conduct to say jobs would be sent offshore only when the investment in "scale, technology or operational knowledge" is unavailable in Canada.

The public outcry over the RBC case led Ottawa to tighten up its temporary foreign worker program, which is supposed to be used only when no qualified Canadian is available.

However, Ottawa did nothing to address the growing use of offshore firms to perform high-tech work. Employees of dozens of other firms, especially in financial services, insurance and accounting, have contacted media outlets to say their companies are also sending high-tech jobs to India.

There is nothing illegal about it. Indeed, most Canadian employers argue the move to suppliers in lower-cost countries is essential to remaining competitive in a global economy.

The market for outsourced IT services grew to $15 billion in Canada last year, according to research firm IDC Canada.

Much of the work remains in Canada, but offshore firms are winning a growing share accounting for $3 billion worth last year.

Such firms are handling everything from cheque processing to large databases, IDC says.

Cost savings is the main benefit, according to six out of 10 employers surveyed by IDC survey for its Outsourcing Monitor in June 2012.

Competitive advantage and access to specialized skills also ranked high on the list of benefits, the survey found.

Torstar News Service

|

(2) Comments

By Grinder|AUGUST 21, 2013 08:06 PM

The changes at RBC did nothing to stop offshoring of jobs. So now instead of bringing Indians to Canada to do IT work RBC sticks to just sending the IT work to India which sends back completed code for specific projects. This has been happening since at least 2007 and is continuing to occur. It remains extremely difficult for mid-level IT people to find work to increase their experience and skills unless they are willing to relocate to other provinces or USA and even that is only a gamble on finding a lasting position that will survive the next wave of offshoring or boatload of IT trained immigrants who will work for paltry wages. It's a good thing that the "recession is over". Bah!